An NFT (Non-Fungible Token) is a unique digital asset that is stored on the digital ledger of Blockchain. NFTs can be anything, whether it’s pictures and videos, Gifs, tweets, game items, music, or even collectibles. Tokens use a digital ledger to provide a public certificate of authenticity or proof of ownership. NFTs can only have one official owner at a time and they’re secured by the Ethereum blockchain. That means that no one can modify the record of ownership or copy and paste a new NFT into existence. Even though anyone can copy the design of your artwork or screenshot your NFT, the original piece will be owned by the creator or a certified buyer.
What is the main difference between Crypto and NFTs?
Even though NFTs are traded with crypto, the difference between crypto and NFTs is the non-fungible nature of NFTs. While all Bitcoins are equal (regardless of constant value changes), one Bitcoin always equals another Bitcoin. When it comes to NFTs, they are unique pieces.
Therefore one NFT is almost never the same in value as another. There might be collectibles with a theme or visual similarities, but the price might vary for each piece. For example, one “CryptoPunk” might cost up to 11 million dollars, while another might cost just a few thousand dollars.
Read more: World’s Top 10 Most Expensive NFT items
Why do some NFTs have different values within collectibles?
NFTs are either one of a kind or one in a very limited run. So what determines the price of an NFT? The main factor to consider is that the rarity of the item is what determines the price.
For example, let’s take a look at the case of CryptoPunks, where one NFT (CryptoPunk #3100) costs almost $11 million. While its similar counterpart might cost significantly less, down to only a few thousand. We have to keep in mind that unique features are what drive prices up. CryptoPunk #3100 is one out of nine Alien punks, the rarest series among the 10,000 CryptoPunks that exist. To break it down, the character is wearing a headband, which is common only among 405 other punks. That is exactly what makes the piece rare and unique.
Another great example of this is CryptoPunk #489. It has the classic shades that only 502 other punks have and a do-rag on its head, courtesy of only 300 other punks. All these attributes bring its price at the time of writing this article at $379,278.
Read more: Why are some NFTs worth millions?
Are NFTs the future of the art world?
Modern artists no longer have to rely on galleries and collectors to sell or showcase their work. NFTs have officially changed today’s art scene. Artists no longer need to face old-school obstacles and deal with third parties or intermediaries in order to promote their art.
NFT platforms give all artists equal opportunities to upload and create/mint their artworks online, and finally, sell their NFTs on auctions. Most artists receive a percentage from all consecutive sales to new owners. This is a great feature that only supports the creators, but also cements NFTs as the prime avenue for artists to expose their art to the world. Traditionally, artists do not receive future proceeds after the initial sale of a piece, which drives them to seek solutions like NFTs in order to thrive in today’s new, digitized economy.
This figurative exodus from the traditional creative avenues is, in turn, offering stability, utility, and longevity to the NFT ecosystem itself.
It is up to both creators and buyers to decide how they want to join the NFT world. Since NFTs offer close to no limitations on possibilities, it only seems fair that we explore these paths.